Kenya Pipeline Company’s (KPC) high-capacity fibre link between Mombasa and Nairobi promises to revolutionise the local internet market through a new pricing model, that will force the big boys in the sector to either shape up or ship out.
The fibre optic cable which represents a major advancement in Kenya’s digital infrastructure and connectivity goals, aims at facilitating the delivery fast gigabit internet speeds and exceptional reliability to homes, businesses, and community networks, significantly impacting service delivery in Kenya’s two largest cities.
Tier 3 Internet Service Providers (ISPs), such as Syokinet Solutions, will benefit from this development by directly accessing bandwidth at lower costs, allowing them to offer competitive rates to end-users. Geoffrey Shimanyula, the Business Acceleration Specialist at EKEKO EA Ltd, said that smaller players being onboarded on the high capacity fibre will be able to bypass third-party costs, which historically inflate prices to consumers.
“Going forward, many of these smaller players will buy a lot of bandwidth from the Kenya Pipeline Company’s high capacity fibre for as little as probably Sh200 per megabyte, repackage it, add a small margin, and sell it to their end-users,” he said.
Extensive infrastructure
Shimanyula explained that lower-tier ISPs typically purchase bandwidth from Tier 2 or Tier 1 providers because they lack extensive infrastructure. “The reliance on higher-tier providers for transit increases their operational costs, which is reflected in the higher prices they charge their customers,” he stated.
“These ISPs primarily serve end-users, making their services crucial for local and remote internet access, but often at a higher cost compared to Tier 1 and Tier 2 providers.”
Speaking during the launch event held at KPC’s Nairobi headquarters, Managing Director Joe Sang, whom on Monday we erroneously referred to as Kenya Ports Authority (KPA) Managing Director, assured those who will onboard the fibre optic services of 99.99 high service level agree ments. He said the launch represents a new milestone for KPC as it strives to expand and upgrade its fibre optic cable in line with its long-term business diversification strategy.
“The strategic partnership with Syokinet will unlock additional connectivity and offer high-speed internet services for homes and businesses between Nairobi and Mombasa. This is a major step forward in advancing Kenya’s digital infrastructure and supporting the government’s visionary Digital Superhighway agenda to accelerate the country’s transformation, creation of jobs and economic growth,” Sang remarked.
He expressed confidence in the security and resilience of the fibre optic cable infrastructure, adding that KPC looks forward to continued expansion, with plans to onboard more local ISPs to further boost connectivity.
“Our cables run securely alongside the pipeline right-of-way, providing inherent protection and minimal downtime. This strategic asset allows us to offer carriers highly reliable and low latency connectivity, and we expect this new service to generate additional revenue for KPC,” Sang stated. “We are actively engaging with more partners to maximise utilisation of our infrastructure for the benefit of all Kenyans,” he added.
Technology Service Providers of Kenya CEO Fiona Asonga said the fibre optic, together with the entrance of Elon Musk’s Starlink offered more options for ISPs to re-invent their business models.
Cheaper rates
She said the cheaper rates provided by the KPC fibre optic infrastructure would allow them to build and lease their own infrastructure, rather than having to afford the high rates being charged by others.
Syokinet CEO Ian Kasyoki commended KPC for deploying “the most robust, scalable and reliable Fibre Optic Cable in the region,” adding that the collaboration represents the tremendous progress in expanding access to world-class digital services.
The American tech titan Elon Musk’s satellite internet firm Starlink has disrupted the network market, wooing customers with sweeter and sweeter bargains and better speeds. This has caused jitters amongst local players, with the country’s leading telco, Safaricom lobbying the regulator to block foreign satellite internet providers (ISPs).
The telco has since written to the Communication Authority of Kenya (CA), demanding that it compels satellite providers to operate in Kenya solely under an arrangement with a local licensee. The public has, however, favoured liberalisation, with many taking to social media platforms to castigate Safaricom for fearing competition.
